Taxpayer A, a cash basis, calendar year individual, owns 78% of a business. A's basis in the business is $100,000. A wants to contribute additional capital to the business in order to improve its financial health. A will contribute an asset to the business with a basis of $2,000 and a FMV of $8,000 and will own 83% of the business immediately after the exchange. Which of the following statements is true?
a. If the business is a corporation that has elected S-status, A will recognize a gain of $2,000 on the exchange.
b. If the business is a corporation, A will recognize $6,000 of gain on the exchange.
c. If the business is a corporation, A will not recognize gain on the exchange.
d. None of these statements is true.
e. If the business is a partnership, A will recognize $8,000 of gain on the exchange.